Walter Lilly & Co Ltd V Dmw Developments Ltd

The contractor was entitled to a declaration in the Part 8 proceedings it brought as to whether it was or was not in breach of contract as a result of the adjudicator's decision

11 December, 2008

The dispute between the parties was referred to adjudication by the contractor. The contractor's concern was that the adjudicator's decision meant that it was guilty of a breach of contract. Whilst the particular terms of the contract of which it was said the claimant was in breach were argued about in detail in the adjudication, the adjudicator makes no reference to them. Furthermore, despite a subsequent request by the contractor, the employer's new contract administrator also refused to identify the terms of the contract with which it was said the claimant had failed to comply. In those circumstances the contractor issued Part 8 proceedings for a declaration that the adjudicator's decision did not meant that it was in breach of contract. The employer contended that the Part 8 application should not be entertained because it was effectively an appeal from the adjudicator. Coulson J rejected that contention. Whilst the adjudicator reached a decision and that decision was temporarily binding on the parties, it was thereafter open to either party to come to court for a final decision on the point considered by the adjudicator. That was what the claimant has done by these proceedings. The Technology and Construction Court endeavoured to deal promptly with any dispute arising out of an adjudicator's decision. That was the attraction of Part 8 in that it offered the means by which a dispute could be finally determined in a speedy and cost-effective way but it was always necessary for a claimant who wants to avail himself of the possible short-cut of Part 8 to be able to demonstrate that the dispute in question fall within its relatively tight confines. The employer maintained that this action was not suitable for determination under the Part 8 procedure and ought to continue as a Part 7 claim. The contractor submitted that the claimant's claim for a declaration was the essence of simplicity. The adjudicator made his decision. The only remaining question was whether the contractor was in breach of contract in consequence. The contractor further submitted that its position was strengthened by the fact that since the adjudication nobody had identified the terms with which it is said the claimant has failed to comply. Coulson J held that the contractor's submissions should be accepted.